N.rajeswari v. The Income Tax Settlement Commission, Additional Bench, 488-489, Anna Salai, Chennai 600 035

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 05.12.2019 CORAM THE HONOURABLE MR.JUSTICE C.SARAVANAN W.P.Nos.29442 to 29446 of 2008 and W.M.P.Nos. 1 to 1 of 2008 G.Subramaniam ... Petitioner in W.P.No.29442 of 2008S.Sampoornam ... Petitioner in W.P.No.29443 of 2008C.Balasubramaniam ... Petitioner in W.P.No.29444 of 2008S.Shankaran ... Petitioner in W.P.No.29445 of 2008 N.Rajeswari ... Petitioner in W.P.No.29446 of 2008 vs. 1.The Income Tax Settlement Commission, Additional Bench, 488-489, Anna Salai, Chennai 600 035. 2.The Deputy Commissioner of Income Tax, Central Circle – III, Office of the Commissioner of Income Tax, 67-A, Race Course Road, Coimbatore 641 018. 3.The Commissioner of Income Tax, 67-A, Race Course Road, Coimbatore 641 018. ... Respondents in W.P.Nos.29442 and 29444 of 2008 1.The Income Tax Settlement Commission, Additional Bench, 488-489, Anna Salai, Chennai 600 035.2.The Deputy Commissioner of Income Tax, Company Circle, 3, Gandhi Road, Salem. 3.The Commissioner of Income Tax, 3, Gandhi Road, Salem. .. Respondents in W.P.Nos.29443& 29445,29446 of 2008 https://hcservices.ecourts.gov.in/hcservices/ COMMON PRAYER : Writ Petitions are filed under Article 226 ofthe Constitution of India, for the issuance of CertiorarifiedMandamus, calling for the records of the first respondent inS.A.No.641/CBE/76/99-IT,S.A.No.641/CBE/77/99-IT,S.A.No.641/CBE/79/99-IT,S.A.No.641/CBE/78/99-ITandS.A.No.641/CBE/81/99-IT and quash the order dated 28.06.2006insofar as it relates to computation of tax alone for theblock period from 01.04.1988 to 05.01.1999 and computation oftax for Assessment year 1999-2000 in Annexure – II andconsequential direct the respondents to give credit of theamount of Rs.74,73,383.88/-, the amount seized during thecourse of search, against the additional income tax payable bythe petitioner as early as on 09.02.2001. Addl.Govt.Pleader 2. On 05.01.1999, a search was conducted in the premisesof the petitioners. This search led to seizure of unaccountedcash and fixed deposits for an amount of Rs.74.4 lakhs. Underthese circumstances, the petitioners who are members of thesame family opted to settle their income tax dispute beforethe 1[st] respondent Settlement Commission under the Provisionsof the Income Tax Act, 1961 for the period covering the blockassessment and assessment year 1999-2000. 3. On 09.08.2000, the applications to settle the disputeunder section 245 D(1) of the said Act were admitted andallowed to be proceeded. In these proceedings, the petitionersprayed for payment of the admitted tax liability in twoinstallments which was also granted by the 1[st] RespondentSettlement Commission. 4. The amounts were to be paid on 30.9.2000 and31.12.2000 by the petitioners. Under these circumstances, by acommunication dated 26.09.2000, a request was made to the 2[nd]respondent to adjust the seized cash and bank balance towards1[st] installment. By another communication dated 19.12.2000, asimilar request was made for adjustment of the additional taxamount from the balance. 5. The Administrative Officer of the 1[st] respondenthttps://hcservices.ecourts.gov.in/hcservices/Settlement Commission also sent in communication through the 3[rd] respondent on 23.02.2001 to make such adjustments conveyingthe decision of the 1[st] respondent Settlement Commission.Relevant portion of the communication of the AdministrativeOfficer of the 1[st] respondent Settlement Commission reads asunder:- 5. The Administrative Officer of the 1[st] respondenthttps://hcservices.ecourts.gov.in/hcservices/Settlement Commission also sent in communication through the 3[rd] respondent on 23.02.2001 to make such adjustments conveyingthe decision of the 1[st] respondent Settlement Commission.Relevant portion of the communication of the AdministrativeOfficer of the 1[st] respondent Settlement Commission reads asunder:- “ A copy of the applicant’ s letter citedabove along with Annexure-A and B enclosedthere to, showing the details of theadditional tax payable by the applicants ofthe above group of amount seized during thecourse of the search is enclosed. In thisconnection, I am directed to convey thatthe Settlement Commission has directed thatthe seized cash in the above group casesshall be adjusted against additional taxpayable by the above applicants.” It is, therefore requested that theAssessing Officer may be directed to directthe above adjustments and report the amountso adjusted to the Settlement Commission.” 6. According to the 2[nd] and 3[rd]respondents, theadjustment was also made on 14.03.2001. However, this aspectappears to have not been communicated to the 1[st] respondentSettlement Commission. The 1[st] respondent in its order dated28.7.2006 also directed the Assessing Officer to verify theposition and adjust the seized amount towards tax and interestpayable by the applicant for the block period and remainingamount towards the tax/interest payable for the assessmentyear 1999-2000. It is further noted that in case any demandis bound payable by the petitioners after adjustment of theseized amount, the same should be paid within 35 days ofreceipt of the order as stipulated under section 245D (6A) ofthe Act. In the annexures appended to the order, there arecalculations of interest payable under Section 245 D (2C) at1.25% per month for some of the petitioners. 7. It is the contention of the petitioners that if theamounts were adjusted then and there as per the directions ofthe 1[st] respondent Settlement Commission and reported to the1[st] Respondent Settlement Commission, the interest in Annexureswould not have been payable by the petitioners. There appearsto be some merit in the contention of the petitioners. At thesame time, the fact remains that the petitioners haveapproached the Settlement Commission for rectification ofmistake on 18.08.2006. However, no orders have been passedin those applications filed for rectification of mistake andhas approached this Court. https://hcservices.ecourts.gov.in/hcservices/ 8. Since the 1[st] respondent Settlement Commission isseized of the aforesaid applications for rectification ofmistake , I am of the view that the writ petitions werepremature. These applications should be decided by the 1[st]respondent Settlement Commission. 9. Under these circumstances, I am of the view that the2[nd] and 3[rd] respondents are directed to take steps to liquidatethe fixed deposits which were also seized and to appropriateamount towards the balance of admitted tax liability andinterest of the petitioners and file a report before the 1[st]respondent Settlement Commission within a period of 4 weeksfrom the date of receipt of a copy of this Order. 10. The 1[st]respondent Settlement Commission shallthereafter dispose the applications filed for rectification ofmistake by the petitioners within a period of 6 monthsthereafter. Liberty is given to the petitioners and therespondents to make appropriate submissions before the 1[st]respondent Settlement Commission and in case there is anyexcess amounts after such adjustment, the same may be directedto be refunded to the petitioners. In case of any deficit,petitioners may be directed to pay the aforesaid amounttogether with interest in accordance with law. 10. The 1[st]respondent Settlement Commission shallthereafter dispose the applications filed for rectification ofmistake by the petitioners within a period of 6 monthsthereafter. Liberty is given to the petitioners and therespondents to make appropriate submissions before the 1[st]respondent Settlement Commission and in case there is anyexcess amounts after such adjustment, the same may be directedto be refunded to the petitioners. In case of any deficit,petitioners may be directed to pay the aforesaid amounttogether with interest in accordance with law. 11. These writ petitions stand disposed with the abovedirections. No costs. Consequently connectedmiscellaneous petitions are closed. Sd/- Assistant Registrar(CS) //True Copy// Sub Assistant Registrar kkn/kkdTo 1.The Income Tax Settlement Commission, Additional Bench, 488-489, Anna Salai, Chennai 600 035. 2.The Deputy Commissioner of Income Tax, Central Circle – III, Office of the Commissioner of Income Tax, 67-A, Race Course Road, Coimbatore 641 018. 3.The Commissioner of Income Tax, 67-A, Race Course Road, Coimbatore 641 018. 67-A, Race Course Road, Coimbatore 641 018. 4.The Deputy Commissioner of Income Tax, Company Circle, 3, Gandhi Road, Salem. Company Circle, 3, Gandhi Road, Salem. 5.The Commissioner of Income Tax, 3, Gandhi Road, Salem. 3, Gandhi Road, Salem. +1cc to Mr.A.P.Srinivas , Advocate SR.No. 101908 W.P.Nos.29442 to 29446 of 2008 and W.M.P.Nos.1 to 1 of 2008A.SK(20/02/2020)